Abstract:
The inventory control system of most business firms in Tanzania for the last three decades has
been considered inefficient. While some firms such as TPC limited in the beverage subsector are
considered better ofT, few efforts have focused on the relationship between inventory control
systems and cost management performance in a business setting. Using a random sample of 30
respondents from 4 departments at TPC limited, in a time frame of 14 years from the year 2000,
this study focused on the relationship between inventory control systems and procurement cost
management performance. Specific issues such as lead time, issuing and receiving procedures
and reorder points were evaluated on how they influence cost savings, stock theft and user
satisfactions. A descriptive analysis of the aforementioned variables indicate that there is a
relationship between inventory control system at TPC limited and procurement cost management
performance. Notably, theft cases were increasing with the increase of stock reorder point levels
and lead times. For example, as reorder points increased from I million to 20 million from the
year 2000 to 2013, the then value increased from 10million to 52million. Similarly, the increase
in lead time had a positive relationship with procurement cost savings and customer satisfactions.
This study recommends that the management at TPC limited should give sufficient attention on
inventory control in order to efficiently manage procurement costs. Specific efforts should last
on lead time and reorder levels to minimize the then risks, increase cost savings and user
department's satisfaction.
